EPCOR and Siemens partner to design near-zero emission coal fueled power facility



    EDMONTON, Aug. 15 /CNW/ - A three-year initiative to design and engineer
Canada's first near-zero emission thermal power plant reached a milestone
today when EPCOR Utilities Inc. (EPCOR) selected Siemens Fuel Gasification
Technology GmbH & Co. KG (Siemens) as the technology provider for the design
of a coal gasification facility.
    The selection is the latest step in the EPCOR-led Front End Engineering
and Design (FEED) of an Integrated Gasification Combined Cycle (IGCC)
technology power plant that could deliver improved air quality and capture
carbon emissions for permanent storage.
    Siemens will licence its SFG-500 coal gasifier technology to the FEED
project. If subsequent investment and construction decisions go as planned, a
270-megawatt (net) generating station using the new technology would be
targeted to commence operations in 2015.
    "Today's agreement is a significant milestone in EPCOR's quest to take
carbon capture and storage technologies from opportunity to operation," said
EPCOR Senior Vice President, Dr. David Lewin. "This Genesee IGCC project alone
has the potential to capture more than one and a quarter million tonnes of
carbon dioxide emissions a year, which would make a significant contribution
towards provincial and federal targets while providing a reliable source of
baseload power generation."
    Siemens has operated its gasification technologies for more than
20 years, using a wide variety of energy sources as feedstocks for the
conversion process. In 2007, as part of the FEED study, 18 tonnes of coal from
Genesee were shipped to Siemens Gasification Test Centre in Freiberg, Germany
for performance testing.
    "While we have secured a number of orders for our coal gasification
technology in China, the U.S. and Australia, we are pleased to have our first
order in Canada," said Michael Suess, CEO of the Fossil Power Generation
Division of Siemens Energy. "This is the first time our gasifier technology
will be used for a full-scale IGCC project. In the future IGCC power plants
could make a significant contribution toward more reliable energy supply with
maximized climate and environmental compatibility."
    The Alberta Energy Research Institute, Natural Resources Canada and EPCOR
have each contributed $11 million to the $33 million FEED project, which is
located at EPCOR's Genesee Generating Station, 70 kilometres southwest of
Edmonton, Alberta. The FEED project is being conducted in conjunction with the
Canadian Clean Power Coalition, which is chaired by Dr. David Lewin.
    In October 2007 the Genesee FEED study became the first project to be
supported by the federal government's ecoENERGY Technology Initiative.
    "Canada's fossil fuel resources are one of our country's biggest economic
drivers, and our government is committed to developing cleaner ways to produce
and use those resources," said the Honourable Gary Lunn, Minister of Natural
Resources. "This project is an example of how our investments are advancing
the technologies required to produce and use energy in ways that protect the
health of both our environment and Canadians."
    The FEED project is currently in its second phase, which is scheduled for
completion in 2009. Following completion of the technology design work and
financing decisions, EPCOR can enter into an agreement with Siemens to supply
the gasification reactor and system components.
    "This project is another demonstration of how government-industry
partnerships are advancing Alberta's Climate Change Plan," said Doug Horner,
Minister of Advanced Education and Technology. "Carbon capture and storage is
an important strategy in reducing greenhouse gas emissions and this technology
strengthens Alberta's position as a global leader in sustainable energy
development."
    EPCOR is preparing an Expression of Interest for the Genesee IGCC
project, seeking to qualify under the Province of Alberta's $2 billion program
for large-scale carbon capture and storage projects.

    EPCOR Utilities Inc. builds, owns and operates power plants, electrical
transmission and distribution networks, water and wastewater treatment
facilities and infrastructure in Canada and the United States. EPCOR has been
named one of Canada's Top 100 employers for eight consecutive years, and one
of only 10 companies to be selected as Canada's Most Earth-Friendly Employers.
EPCOR is headquartered in Edmonton, Alberta. EPCOR's website is www.epcor.ca.

    The Siemens Energy Sector is the world's leading supplier of a complete
spectrum of products, services and solutions for the generation, transmission
and distribution of power and for the extraction, conversion and transport of
oil and gas. In fiscal 2007 (ended September 30, based on IFRS), the Energy
Sector had revenues of approximately EUR20 billion and received new orders
totaling around EUR28 billion and posted a profit of EUR1.8 billion. The
Energy Sector had a work force of 73,500 at the beginning of fiscal 2008.
Further information is available at: www.siemens.com/energy.

    All figures represent the sum of the nonconsolidated figures for the
Power Generation and Power Transmission and Distribution Groups and for the
Oil and Gas activities of the Industrial Solutions and Services Group.

    FORWARD-LOOKING STATEMENTS

    Certain information in this News Release is forward-looking and related
to anticipated financial performance, events and strategies. When used in this
context, words such as "will", "anticipate", "believe", "plan", "intend",
"target", and "expect" or similar words suggest future outcomes. By their
nature, such statements are subject to significant risks, assumptions and
uncertainties, which could cause EPCOR's actual results and experience to be
materially different than the anticipated results. Such risks, assumptions and
uncertainties include, but are not limited to, operating performance,
commodity prices and volumes, load settlement, regulatory and government
decisions including changes to environmental and tax legislation, weather and
economic conditions, competitive pressures, construction risks, availability
and cost of financing, foreign exchange risks, availability of labour and
management resources and the performance of partners, contractors and
suppliers.
    Readers are cautioned not to place undue reliance on forward-looking
statements as actual results could differ materially from the plans,
expectations, estimates or intentions expressed in the forward-looking
statements. Except as required by law, EPCOR disclaims any intention and
assumes no obligation to update any forward-looking statement even if new
information becomes available, as a result of future events or for any other
reason.



    Backgrounder

    Creating a long-term source of clean baseload power

    EPCOR Utilities Inc. is leading Canadian efforts to commercialize
technology that will allow for the continued use of one of the country's most
abundant resources - coal - to produce electricity with near-zero emissions.
By turning coal, oxygen, and water into synthesis gas (syngas) through a
gasification process - and then capturing CO(2) - we can dramatically reduce
greenhouse gas and smog-related emissions to produce power that's cleaner than
the best natural gas facility.

    Genesee IGCC Project

    EPCOR is conducting front-end engineering and design (FEED) work on an
Integrated Gasification Combined Cycle technology (IGCC) power plant - a
process that has an emissions profile fundamentally different from
conventional coal-fired plants. The work is taking place at our Genesee site,
west of Edmonton, in conjunction with the Canadian Clean Power Coalition,
chaired by EPCOR Senior Vice President Dr. David Lewin. The Alberta Energy
Research Institute and Natural Resources Canada have each contributed
$11 million to the $33 million project.
    The design of the IGCC plant is being developed with CO(2) capture as a
critical element of the project. This would allow for CO(2) to be piped
underground for long-term sequestration, or for use in enhanced oil recovery
(EOR). The combination of IGCC and CO(2) sequestration, at this scale, has not
been used anywhere else in the world.

    The Genesee process

    The potential Genesee gasification facility would convert oxygen, water,
and coal into syngas, which consists predominantly of carbon monoxide and
hydrogen. Through a "shift reaction", the carbon monoxide can be converted to
carbon dioxide and more hydrogen. The hydrogen can be used in a combined cycle
power facility while carbon dioxide can be captured, sequestered, or used in
enhanced oil recovery applications.
    The use of CO(2) for enhanced oil recovery is a proven technology with
commercial applications in Weyburn, Saskatchewan, the United States and
internationally. Genesee is located close to oil fields nearing a stage when
CO(2) could be used to produce incremental oil to extend their lifespan.

    
    FEED Milestones

    -   Siemens chosen as technology vendor (August 2008) and licences its
        SFG-500 coal gasifier technology.
    -   18 tonnes of Genesee coal shipped to Siemens in Germany as Phase II
        focuses on adapting technology to Alberta coal, removing emissions of
        concern, commercial-scale geological storage of CO(2), cost
        competitiveness and certainty, and construction and operation in a
        northern climate.
    -   Phase I findings establish gasification of Alberta coal as the best
        technology for further development over amine scrubbing and oxy-fuel,
        February 2004
    -   Conceptual engineering and feasibility studies undertaken mid-2001 to
        2004
    -   Front-end engineering and design is scheduled for completion in 2009,
        following which a consortium of investors would be in a position to
        make the decision on building a utility-scale pilot plant. If
        approved, the study would be followed by environmental permitting for
        construction in Alberta. Construction of an IGCC plant could commence
        as early as 2011, in which case it could be operational by 2015.
    

    Siemens Technology

    EPCOR, with support from the Canadian Clean Power Coalition, the Alberta
Energy Research Institute and Natural Resources Canada, has entered into
agreements with Siemens Energy Sector, a division of Siemens AG, to provide
engineering services and licensed technology information.
    The engineering agreement defines the scope for the next portion of FEED
work that will be completed by Siemens, including comprehensive engineering
review and preliminary design of the gasification island, leading to a
detailed plans and a cost estimate.
    Should EPCOR choose to pursue the IGCC plant through to construction, the
license with Siemens will remain in effect so as to allow operation of the
gasification island.

    IGCC Technology

    Integrated Gasification Combined Cycle combines two technologies - coal
gasification and combined cycle. Combined cycle plants generate electricity
more efficiently and consume less fuel per kilowatt-hour of output than do
conventional generators.
    The development of an IGCC plant is complex, requiring more engineering
and analysis. Gasification technology and detailed plant configuration must be
optimized for the specific type of coal at Genesee. With only 19 operating
IGCC plants in the world - and none with carbon sequestration - reference
plants are in their developmental stages.

    IGCC and Gasification

    With IGCC, impurities are removed before the syngas is burned in a gas
turbine to produce power. Waste heat from the gas turbine and other process
sources is used to produce steam, which powers a steam turbine for electricity
production. This differs from conventional power plants where coal is crushed,
fed into a boiler, and then burned.
    In addition to power generation, gasification plants can produce more
than one product - this is known as polygeneration. For example, syngas can be
used as a fuel, as a petrochemical feedstock, or further processed into
hydrogen for use by bitumen upgraders and crude oil refineries. The range of
products immediately obtainable from syngas includes substitute natural gas or
bulk chemicals like ammonia and methanol.


    About EPCOR

    EPCOR Utilities Inc. builds, owns and/or operates power plants,
electrical transmission and distribution networks, water and wastewater
treatment facilities and infrastructure in Canada and the United States. EPCOR
has been named one of Canada's Top 100 employers for eight consecutive years,
and is headquartered in Edmonton, Alberta. EPCOR's web site is: www.epcor.ca

    About Siemens

    The Siemens Energy Sector is the world's leading supplier of a complete
spectrum of products, services and solutions for the generation, transmission
and distribution of power and for the extraction, conversion and transport of
oil and gas. In fiscal 2007 (ended September 30, based on IFRS), the Energy
Sector had revenues of approximately EUR20 billion and received new orders
totaling around EUR28 billion and posted a profit of EUR1.8 billion. The
Energy Sector had a work force of 73,500 at the beginning of fiscal 2008.
Further information is available at: www.siemens.com/energy





For further information:

For further information: Media Contacts: EPCOR: Tim le Riche, Corporate
Relations, (780) 969-8238; Siemens: Alfons Benzinger, Phone: +49 9131 18-7034,
E-mail: alfons.benzinger@siemens.com, Energy Sector - Division Fossil Power
Generation, Freyeslebenstr. 1, 91058 Erlangen, Germany; Natural Resources
Canada: Jasmine MacDonnell, Press Secretary, Office of the Minister, Ottawa,
(613) 996-2007; Government of Alberta: Kevin Donnan, Public Affairs Officer,
Advanced Education and Technology, (780) 427-0405

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EPCOR Utilities Inc.

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